A-LevelAccountingAnalysis and communication of accounting information9706/12 · May/June 2015 · Q201 Mark
A company's gross profit ratio (margin) for the year ended 31 December 2013 was 25% but increases to 28% for the year ended 31 December 2014. What could have been responsible for the increase?
Aan increase in the cost of purchases during 2014
Ban increase in the volume of sales during 2014
Can over-valuation of inventory at 31 December 2014
Dan under-valuation of inventory at 31 December 2014
✓ Correct answer
C: an over-valuation of inventory at 31 December 2014
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